Sunday, January 11, 2009

Japanese Economy

How has Japan fared with it’s economies booms and slumps? This investigation is based on stage 4 unit 1 of the Business and Economics A-level course, “What happens in booms and slumps?”. The unit focuses how people and businesses are affected by booms and slumps, why they continuously appear and the governments role in helping to control these two events. The investigation will therefore focus on Japan and the way booms and slumps affect the Japanese businesses and people. To determine this the investigation will focus on Japanese economic growth, inflation, unemployment rates, trade and Government economic policies. It is true that in a boom there are large amounts of trade. High demand, high GDP, low unemployment and high inflation (more spending). In a slump the opposite is true. "Recession - High Unemployment, low wages, low demand џHigh Inflation - More spending, higher demand, higher prices, higher costs of production. "Low Inflation - Less spending, low demand, low costs of production. "Downward Multiplier Effect - This occurs when there is too much demand. Then when there is a slump a deficit occurs because of the surplus that might have occurred in the boom. It is difficult to begin to analyse the Japanese economy since the information about it is very mixed. On one hand we have the news that Japan is coming out of a recession and in the other that Japan is going into one. The information released by the government assures us that Japan is improving its economic stability, while the media and world banks tell the opposite story.The Bank Of Japan is looking to ease its monetary policy (control of interest rates to control bank lending) and to fight the deflation by creating inflation. While on the other side we are being told that the unemployment rate is easing from an unprecedented 5.0% to 4.5%. So which one is true. It is true that Japanese economy has improved, it has come out of it’s recession but it still faces several problems that may keep it from expanding, these are: "Consumer demand is still weak - Between the years 1989 and 1998 household savings have decreased from 7.6% to 7.1 per cent. This means people have started spending more but still in low quantities. џUnemployment in Japan is at around 4.9%. - Although temporary workers and one day contract workers have increased full time employees have been laid off more. "Corporations continue to restructure themselves. - The Japanese are adopting a more American industry. The relationship between workers and employers and the management is changing. This change is also a factor to the improvement of the economy. So what exactly pulled Japan out of its recession. One of the major factors is the low interest rate (montary policy) that encouraged people to save less and spend more thereby creating demand. By creating demand they initiated the circular flow of income. What this means is that households had more money which they spent on products and because there was demand once again the factories started producing, this led to the need for workers and the workers were paid wages which could then be spent. The other reason is major Government intervention, through fiscal policy. Although this large spending by the government to create aggregate demand to keep the economy alive worked, it has increased the countries national debt which has to be paid off and not only that but this active implementation of fiscal policy has created a fiscal deficit. So far the damage created by the fiscal deficit has been non-existent but because of the increased debt public spending may later become strained especially if interest rates increase and people stop spending money once again. Then where will the government get the money from. This fiscal policy can serve also as a mask over the economy because it is hard to estimate in how much trouble it really is if artificial demand is created. The government has spent $1 trillion US on their “stimulus” budget and $500 billion to help sustain their banking system. Apart from the government intervention the recession has caused the Japanese to rethink their whole management structure. This now means instead of the rest of Europe trying to model themselves on Japan, Japan has started to model itself on the Western way of running a company. More specifically the American way. One of these tactics is restructuring where the “social contract” between companies and their employees has been revamped. So out goes the loyalty and hard work from the workers and the employers no longer offer life long jobs. This in turn has the effect on households to rethink their financing. Because jobs are easier to gain or loose money is much more carefully managed. The effect is drastic, even peoples holiday locations and benefits are affected by this change. Like with most economies it was true with Japan when they went into their recession their imports became low and their exports increased. This is because of the recession it became cheaper for other countries to purchase from Japan and it became more expensive for Japan to purchase from abroad, the yen was very weak. Now that they are breaking out of their recession their trade, their imports and exports have increased (although it is more common for exports to decrease) with Asia. They are trading far more in IT equipment which may prove to be their saviour, their trade with China has also increased in textiles products. Japan took some very strong and drastic spending to recover its economy which has caused them a fiscal deficit, The Government has relied far too heavily on their fiscal policy which helped them out now but what about later. And although they did use monetary policy (lowering interest rates) to increase spending it had little effect. Their companies are going through a major “reconstruction” which will affect their “fixed expenses” and affect the unemployment for the worse in the short term. In Japans case government intervention has had a positive effect and without it the economy would have certainly gone in a major slump but in the end the government is not powerful enough to sustain the economy by itself, it needs help. This help should come in the form of the businesses that make up the economy. It is a good thing that the Japanese firms are looking outside of what they know because it can only lead to improvement. A mixed economy is a right economy.

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The Importance of Organizational Behavior

The importance of organizational behavior (OB) in today’s corporate world is akin to having standard operating procedures (SOP). During this paper, I will attempt to convey why my chosen sub-topics are important for organizational behavior, and how they essentially add to the success of an organization. My sub-topics include motivation, work performance, equal opportunity, career advancement, quality of work, and job satisfaction.

In a professional setting, it is imperative that a leader is capable of motivating his/her employees, primarily by example. First and foremost, the leader of the pack has to be self-motivating. When one possesses the ability to be self-motivated, it makes it a lot easier to extend themselves to motivate others. Most people believe that if a person is old enough to enter the professional field, that people should be able to motivate themselves. Douglas McGregor states; “people enjoy work, have untapped stores of creativity, intelligence and imagination, are relatively self-directed and do not rely solely on extrinsic rewards or punishment” (Douglas Mcgregor, Theory Y). Douglas also contradicts himself with theory X which states; “people do not like work, require constant supervision, do not thrive on challenges and will slack off as much as possible” (Douglas McGregor, Theory X). Although Douglas puts forth a good argument, both theories completely contradict each other. There is a lot of truth to what he says about people and their ability to work or motivate him/herself but this is the main reason why it is important to have a person with leadership qualities to oversee a department. It becomes a huge problem when a leader of a department is lazy and has no aspirations. The difficulty level for such managers constantly stays high because of the lack leadership qualities. Nowadays when you go to apply for employment, there is usually a question asking whether or not you possess any managerial experience. The reason for this is because; companies these days are look for people with leadership ability as well as the required educational background. It begs the question to say that not every educated or experienced worker possesses leadership skills.
When a workplace is spear headed by a person who is well motivated, it shows in the quality of work and also the success of the company. It is very important for the leader of the pack to come in each morning to get things started in the work place. The person has to be on time and set better examples for his/her employees to follow. When this happens, it hopefully becomes a chain reaction. Everyone involved in that workforce will automatically assimilate towards what the rest are doing. No one ever wants to be the outcast so when things are done in certain way, even the most unmotivated employee will find it difficult not to conform to the rest of the group. A well-rounded leader is a vital key in having a successful workplace.

Work Performance:
In a workplace, the performance and productivity of the workers is also very important. If the business is to be successful, it will start (and end) with the work of the employees. The leader of the workplace has to makes sure all employees are doing efficient work. A way to ensure excellent work performance is make the employees feel as though they are there for a purpose and not just to pick up a paycheck. When employees start to feel that they are just there to pick up a paycheck at the end of the week, without finding some kind of meaning and value in their work, the quality of work starts take a downward spiral. The leader has to be able to convince his/her employees that the workplace is their second home and that they are apart of something special. Work performance and job satisfaction have a common bond in that, if one aspect is lacking, it causes the other do the same. Workers will often work harder if they know that they are valued and are part of something meaningful. Some might say that it is unprofessional, and that the workplace is no place for “feelings” and that a worker should want to do his/her without having to be emotionally coddled. History however, has thought us that people generally respond better to an environment where their emotional well-being is nurtured. I sincerely believe in the concept of reward for a good work performance. Work performance is very vital to the success of an organization. It is solely left up to the leader to make this happen and capable leader should be able to accomplish this feat without exactly having to “baby” his/her employees.

Career Advancements:
Establishing the right career processes for career advancement is an important tool in achieving the right kind of OB because it makes a huge difference when it comes to retaining your workers. It is essential to give the employees something to look forward to, not so much as a reward but more as an acknowledgement for their hard work as well as a job done well. The employees have to have something to work for and this is when the issue of work performance comes into play. There has to be some tangible incentive for good job performance other than personal pride. In an age of ever decreasing benefits for employees, the powers that be need to realize that their bottom line (profits) cannot and will not be possible without their employees. Businesses should take notice and provide employees with what they need and in turn, employees will provide employers with the service they require.

Job Satisfaction:
The one thing that all companies worry about is whether or not their employees are happy. Happy employees make happy workers. The single most detrimental force to a company is employee dissatisfaction. It behooves a company to establish a way of assessing employee satisfaction. Once the leader of the specific workplace has gotten his/her employees to be satisfied with responsibilities, and compensation the rest will follow. As mentioned earlier in the paper, there is direct correlation between work performance and job satisfaction. One of the biggest challenges facing some companies today is employee retention rate. In short these companies have become revolving doors where employees come in and leave just as fast. What starts to happen is that these companies become desperate and start hiring less than adequate talent. The end result is usually a company primed for falling or a take over. It is essential that your employees are satisfied with jobs, anything less results in their pursuit of other opportunities. I find that regardless of the monetary situation, if the employees are unhappy in the work place, job satisfaction fails exist. It is those intangible in-betweens that employers must pay attention to.

Communication is very important to the success of an organization. Everything starts with effective communication. This applies to businesses as well. A leader has to be able to communicate effectively with his/her employees. Most activities begin with communication and when there is lack of effective communication, things fall apart. The ugly monster of doubt a speculation rears its ugly head. Communication constitutes keeping employees informed of what is going on behind the scenes as well as taking the time to listen. As previously stated, employees generally respond to an emotionally nurturing environment. The age of the “no-nonsense leaders” has past its time. It is time managers realize they are dealing with humans and not machines. Organizational behavior therefore becomes the very culture on which a company is run. It makes a huge difference in the operation of businesses to have a good organizational behavior in place. In short, organizational behavior is essential to businesses and in its absence, chaos rules.

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